Look for a touching of the all time high

The markets just opened and looking at the futures it looks to be a positive morning.

I would look for a touching of the all time high coming in the next two trading days. We are close.

On a personal note, I am working with a company called the Podstar Network to have a weekly Options Podcast Radio Show. This is some of the reason I have not been posting as much. But expect the show and more postings to occur in October!!!

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Pattern completely broken!

OK after todays gains which I thought were going to be losses on the DOW a test and bounce off of the resistance line (the former support line of the wedge) is what I expected. The pattern of a Bearish Rising Wedge is entirely broken. To top it off we had good volume today. I am going to wait tomorrow and see what it brings and then look for appropriate trades. In this case we would be bullish as that is the trend right now; however it is not the right time of year to be bullish (September and October are traditionally bearish months) so I am still going to be very conservative and watch my trades closely.

Look for new trades coming soon.

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HEAD FAKE on the DOW!

OK I almost posted on Tuesday, excitedly, that we broke the channel and stayed above it. The pattern was broken. Look for a small bullish rise to find a new resistance and support lines. The reason I didn’t and I waited was due to low volume on the breakout on Monday.

Well after yesterday and the start of today, I was right to wait. It has broken the other way like the pattern suggests, but the same thing applies here. The breakout should be on heavy volume. Go back to the “Volume +” indicator to determine if the volume is heavier than normal. The more volume the more likely that it is a true breakout of the channel.

Lets watch and see what happens today.

By the way the S&P 500 really followed the Bearish Rising Wedge pattern check it out….

Chart provided by Big Charts

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Is today the day for the DOW?

The opening of the DOW looks good today ahead of employment data, which should be good!

So do we have a 100point day and break 11,450? IF we do then what?

Well it is an interesting trading time. Labor Day is Monday and the markets will be closed, but the rule I use for broken channels holds.

We wait one day after the break to see if the break holds and the stock or index does not fall back into the channel.

So in this case we will need to wait until after the close on Tuesday to see if the markets stay out of the channel. Now realize that the channel that is forming is a bearish wedge so breaking above the channel would be against the theory of this pattern so we would definitely want to wait the extra day because it is highly more likely that the index will break through the bottom support rather than the upper resistance. So we need to use caution that a break above resistance is not a false break out!

Now all this is speculation because as of right now we are still well below 11,450 (11,422 to be exact) but there is some news that can move the markets coming later today.

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